The problem is that here is a router (at a cottage), which only allows 2 connections. but we need wi-fi for 8 devices. so the plan is to create another wi-fi spot to share our connection. is there a tool or tutorial for that?

Yes you can use Internet sharing with a single WiFi connection. Just enable it from the System Preferences. (The previous poster is wrong. I did this at my Mom's house to allow iPad and iPhone use and it worked fine.)

At least on my machine, if you choose System Preferences > Sharing > Internet Sharing and then select "Share your connection from AirPort," the only options are Bluetooth and Ethernet. So no, an incoming Wi-Fi connection cannot be turned into an outgoing Wi-Fi connection.
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DoriOct 16 '10 at 23:42

One possibility: my Mom's still using Tiger, so maybe that's something that changed in Leopard or Snow Leopard. It is true that when I enabled the sharing over WiFi, OS X showed a warning that I might be violating the terms of service of my ISP. Sounds like the ISPs have successfully lobbied Apple to remove the option.
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StephenNov 8 '10 at 15:43

You could do it with the built-in Sharing feature (System Preferences->Sharing), but it would require two wifi cards in the device acting as the bridge. More broadly, to my knowledge, it isn't possible to share a connection in the way you are proposing with a single wifi card (though you could extend the signal, it would still be limited to the same number of connections as that is bring managed by the original access point).

You don't need two adapters. Internet sharing works fine with a singke adapter.
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StephenOct 16 '10 at 18:38

2

But not from the same wi-fi you're trying to share from! Put another way - your wifi card can either be acting as a base station (which is what you do when you share through it) or it can act as a client adapter - it can't do both at the same time.
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rjstreetOct 16 '10 at 18:39